Category: Legal Articles

Advice When Signing A New Contract


For business owners or individuals who are involved in a daily commercial transactions and see to sign a contract or an agreement with the other party to include their mutual understanding, it is essential and necessary when doing so to understand the main points that needs to be clarified, covered and included when drafting a contract or an agreement. It may vary from one contract to another based on the nature of the transaction or the type of the activity but in general it should comprise the main conditions of any contract. Here in this article we will try to highlight the most common mistakes that always committed by the parties which may unfortunately leads to lose the right to claim or fail to receive the full disputed right.

Essential Conditions of Contract: –

Place of the Contract:

Defining the place where the contract is made is very important point and it also differs than where the contract will be executed. It usually helps the court in determining its jurisdiction or the true will of the parties in certain occasions.


The Full Details of the Parties:

Apparently, you will think that it is not that important to care about this point, as definitely the Parties will write their names on the contract. But be advised that the loss of your rights may starts from that point.

Most of the Parties when drafting a contract, they negligently or intentionally don’t write their names in the correct way or in full, especially when the Parties are companies or a company and individual, also they forget to write the capacity of the contracting party or the signatory person on the contract whether personal or on behalf of a company or another individual.

Therefore, be reminded to write the full name of the two contracting parties, their nationalities and passport numbers or any ID numbers, his registered address, PO Box, Fax, Telephone and email address.

It is important also to collect a copy of the identification documents from the other contracting Party, if individual and a copy of a valid commercial license and copy of the Manager’s passport if the contracting party is a company, and if another signatory person will sign the contract on behalf of the Principal, you should have his passport or ID copy and his POA that authorize him to sign such contract.

Let us ease that matter by giving you an example for further clarification, Ahmed and Mona want to sign a Sale Agreement to sell Ahmed’s unit to Mona, but in fact Ahmed owns a Real Estate company LLC “called ABC” on which the unit is registered under its name, so let’s see the common mistakes when defining the contracting parties: –

  • The wrong way:

1.Ahmed XYZ, …… (First Party)

2.Mona, ……… (Second Party)

  • The correct way:

1.M/s ABC LLC, represented by Mr. Ahmed ………. (First Party)

2.Mona, …………… (Second Party)

You may add Ahmed and his Company as a First Party, because the property is registered under a company name and Ahmed is the real owner of the property.

Defining the parties clearly in the contract is a crucial step to protect your business transaction, some parties intentionally don’t give full details of their identification or capacity to sign this contract or don’t mention the legal form of the contracting company and this will lead to another problem when there are other companies holding the same name but slightly different in name or in legal form. So just make sure to review the identification documents of the other party or the Company license and its signatory person before signing any agreement.


The Subject of the Contract:

This clause should explain why the parties are signing this agreement, the purpose of having this understanding in writing, which will define in general type of the agreement whether its sale, lease, conditional sale, loan. Most of the parties fail to give proper explanation to the true will of the parties on which the judge will focus in interpreting the agreement. Thus, seeking your lawyer’s advice before you proceed with signing any agreement will be so helpful to cover any confusion that may arise afterwards.


The Value of the Contract and Payment Terms:

Carefully you have to write down the total value of the contract, stating in details how, when and where it should be settled by one of the parties. You may add some clauses to cover any default in payments.


The Term of the Contact:

If the contract has a fixed duration, so be very accurate on whether its renewable and the way of renewal or termination of the contract. In sale & purchase agreements “SPA” you have to determine when the sale will be effective whether upon signature or from the time of receiving the down payment. Additional clause can be added to avoid any default in payments such as holding the transfer of title until receipt of the full payments of the purchase price.


The Mutual Commitments of the Parties:

The parties are free to add all the points of their understanding, stating the obligations and when and how it will be fulfilled and the time frame. Make sure that there is no conflict or confusion between these clauses and any other clause of the contract, no repetition to the same phrase. The arrangement of the mutual obligations will help to determine whose commitments comes first, and this is one of the common arguments nowadays before the courts.


The Applicable Law & Court Jurisdiction:

Determining the applicable law and the competent court in the contract in resolving any disputes that may arise between the parties is very important in protecting your interests. Many factors will assist you in finding the most appropriate court jurisdiction such as nature of business, place of executing the contract and address of the parties.

You may use the Arbitration as an alternative dispute resolution, but you will definitely need an arbitration lawyer to help you in drafting an arbitration clause, after explaining not only the advantages and disadvantages of the Arbitration but also the proceedings and the cost of Arbitration in comparison to the courts.


Here are the main conditions that you should take in consideration when signing a new contract, there will be additional clauses to be added based on the nature of each transaction. In general, considering the above will help you in reducing the risks of any new business deal, but at all time seeking a legal advice before you sign any document will ensure that you are on the right way.



If you wish to discuss or have any questions, please contact Yasin Al Hamed Advocates and Legal Consultants :


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Lawful Termination or Arbitrary Dismissal

Have you ever faced an unfair dismissal from your employer? In this article we will try to highlight one of the most important matters that are facing the parties of any employment contract whether employees or employers. The UAE legislator has stipulates some rules to regulate and arrange the matter of termination of employment contract […]
Labour and Employment law
Have you ever faced an unfair dismissal from your employer?

In this article we will try to highlight one of the most important matters that are facing the parties of any employment contract whether employees or employers.

The UAE legislator has stipulates some rules to regulate and arrange the matter of termination of employment contract whether it happened by the employer or the employee so it will be lawful if it happened in specific circumstances or it will be considered as arbitrary dismissal.

Arbitrary dismissal is any form of dismissal or coerced resignation for unlawful or unproven reasons, or against the specific rules and regulations set down by the government.


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Registration for VAT in UAE

About VAT Registration in UAE

A business is a serious activity requiring time and effort usually being a commercial or sometimes an industrial enterprise within its pursue to overall profit-oriented. It is also a kind of work relating to the production, buying and selling of services or goods as it aims to make a profit.

The definition of business may cover several aspects of activities, such as industrial, commercial projects etc.

In the light of the executive regulations on value added tax VAT No. 52 for the year 2017 any business that exceeds the mandatory registration limit which is AED 375,000 over the past 12 months shall be registered for VAT. Also, any entrepreneur shall be register if the expected value of taxable supplies will exceed that limit within the next 30 days.

It is noteworthy that a Dh 20,000 fine shall be subjected to the one who fail to submit a registration application within the time frame specified in the tax law.

You can also register for VAT voluntary as your total value of taxable supplies exceeds the voluntary registration limit which is AED 187,000 over the past 12 months or it is expectable to be within the next 30 days.

The taxable supplies in which is determined by the law of VAT on the percent 5% or 0% of taxable goods or services carried out in the United Arab Emirates.

Good news also is that a ‘representative member’ who represent a group of companies shall have the right to register as a tax group in order to simplify the procedures and save costs as well provided that they have an establishment in the United Arab Emirates and are legal persons under common control.

Therefore, if you about to register for VAT keep in mind to bring records of all supplies and imports of goods and services, tax invoices, accounting records and documents in relation with the business activity. Henceforth, you will have to charge VAT on your business unless the zero-rated ones.

This significant financial mechanism makes a positive contribution to enhance the economy thus provide the country to keep going along the right line of sustainable economic development processes.


If you wish to discuss or have any questions, please contact Yasin Al Hamed Advocates and Legal Consultants :


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